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Julianne Malveaux

There Were Alternatives to Bankruptcy in Detroit

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(NNPA) You don’t have to be from Detroit to be angry at what is happening there. And you don’t have to be from Detroit to lend your voice to an injustice that not only affects Detroit, but also the rest of the nation. If you agree with the Rainbow/PUSH Coalition on this matter, please go to change.org, search for Detroit Bankruptcy, and sign the Rainbow/PUSH-sponsored petition.

Michigan Gov. Rick Snyder has pulled a fast one on the citizens of Detroit. When he appointed Emergency Manager Kevin Orr, he fast-tracked the bankruptcy process with just 90 days elapsing between Orr’s appointment and the beginning of bankruptcy proceedings. Had Orr moved in a more deliberate manner, the citizens of Detroit may have had some input in the process.

Instead, the people of Detroit have had neither voice nor vote in a process that circumvents democracy. The 23,000 pensioners who retired from government service, those who use open space and recreational facilities such as Belle Isle (now leased to the state) or the Detroit Museum, those who depend on already-eroding city services, including garbage pickup, public lighting, and other services are allowed no say in the status of their city.

Why is the Emergency Manager rushing bankruptcy? There are alternatives, including restructuring. Raising taxes on water supplied to suburban cities is another way to raise revenue. Instead of moving in this direction the Emergency Manager seems to favor selling valuable assets.

Is this what the state had in mind when they voided a law that required the city’s police and firefighters to live in Detroit? That move eroded the revenue base, and it also left the city less safe because protective service workers are not readily available.

Instead of bankruptcy, an option for Detroit might be federal and state assistance. Five years ago, Chrysler and General Motors said they would fail if they couldn’t get help from the federal government. More than $80 billion was spent to help them and some of their suppliers. Congress and the auto companies justified their request for help by saying that the failure of these large companies would cut employment by at least 1 million workers at a time when the unemployment rate was plummeting.

If Detroit-based companies deserve federal assistance, loans, and grants, why doesn’t the city of Detroit?

In 1975, New York City was about to go bankrupt when federal and state authorities put together a Municipal Assistance Corporation to bring the city back to life. While disaster relief hardly constitutes a bailout, we spent $110 billion in disaster relief in New Orleans. When Superstorm Sandy destroyed homes and businesses in New York and New Jersey last year, Congress spent $51 billion in relief. One might argue that the fiscal state of Detroit is a disaster, a disaster manufactured by political forces pandering to the mostly-White suburbs in favor of a city that is 80 percent Black.

In response to this manufactured disaster, it is not unreasonable for the federal and state governments to provide assistance to rebuild Detroit. Just as the automakers argued that their bankruptcy would eliminate jobs, so might Detroit argue that its bankruptcy will not only disrupt Michigan’s economy, but also the nation’s. The effort to cut pensions, and thus spending, has a negative effect on the overall economy. Restructuring health care obligations to the public sector (Obamacare, Medicare) represents a federal subsidy. While it may be unavoidable that future pensioners face a different set restructuring of benefits and health care, it breaks a covenant when current retirees find the conditions of their retirement packages altered.

From a distance, many will look askance at Detroit; it’s alleged “mismanagement” and a series of scandals that have tarnished the city’s image. Tarnished image or not, pension cuts hurts the most vulnerable. In Detroit, the average pensioner receives just $1,900 a month, and current pension costs represent just 4 percent of total revenues. No one who retired from service to the city of Detroit is eligible for Social Security, so pensions and savings represent the sole source for their support. This isn’t just happening in Detroit. As many as 100 cities are looking to see if Detroit’s possible pension-busting is something they can replicate in their states.

Gov. Snyder will argue that he appointed an Emergency Manager because the city wouldn’t manage itself. He won’t disclose that the state of Michigan owes Detroit money, and that his Emergency Manager, with unlimited power, has spent more than $100 million “studying” the Detroit fiscal situation.

Detroit did not request an Emergency Manager. The governor imposed him on them. Detroit did not file for bankruptcy, the emergency manager did. The state government takeover of Detroit is not just a Detroit issue. If Gov. Snyder gets his way, he will set a precedent for any ailing city to be taken over and to have its voting rights, and fiscal discretion, suspended.

The people of Detroit have not been allowed to weigh in on the future of their city, and those they elected have been placed at the periphery of negotiations. The move toward bankruptcy is both undemocratic and fiscally imprudent. And it is part of a trend that may hit your financially strapped city.

Julianne Malveaux is a Washington, D.C.-based economist and writer. She is President Emerita of Bennett College for Women in Greensboro, N.C.

Republicans' Venom Aimed at Obama

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(NNPA) At press time, it was unclear whether Congress would finally evade a government shutdown on October 1. I do know, however, that I am sick of the budgetary brinkmanship that plagues our government. Every few months there is some crisis or another that has the House of Representatives and the White House at loggerheads. This time, Republicans in Congress want to defund Obamacare as part of the budget that must be passed and say they are willing to let government close to meet their goal. Senate Minority Leader Harry Reid says that Republicans are holding a gun to the American people’s heads and he isn’t lying.

It doesn’t stop on October 1. The back-and-forth exists because Congress has not passed a budget the way it normally does since 2009. Now, government operates through a series of continuing resolutions that make it difficult for federal departments to know how much they have to spend. And if Congress passes an agreement to keep government open, it will only keep it open through November or December 15, depending on which version (House or Senate) of the law passes.

Another upcoming deadline is the October 17 deadline to raise the debt ceiling or further imperil our once-solid credit rating. In each instance, Republicans have another opportunity to crow about their fiscal mindedness and argue about Obamacare. But, as Harry Reid has said, Obamacare is the law of the land. It takes effect October 1, government shutdown or not. The Republican House may despise Obamacare and they may change some provisions of it, but they can’t stop it now.

Indeed, Republicans are gearing up for the debt ceiling debate, which is another opportunity for brinksmanship. If they remove the Affordable Care Act from negotiations, it will surely resurface when the debt ceiling is discussed. We can spend the rest of this year, and part of next, with this budgetary brinkmanship, all driven by the fact that many Republicans simply cannot stand the notion of the Affordable Care Act.

Actually, it’s not just about the Affordable Care Act, it is about President Obama and Republican resistance to anything he proposes. Their attitudes go beyond partisanship to venomous distaste. You’d have to go back to the nineteenth century to find members of Congress so rude as to holler out “you lie” as a President spoke, assertions that that thing would happen “over my dead body” are far more common. It has always amused me when people so quickly offer their dead bodies up for discussion, as if they so lightly value their living bodies that they’d offer their dead one in the name of public policy. Just recently, Rand Paul said the federal government would bail out Detroit over his dead body, and years ago Dick Armey (R-TX) said the minimum wage would pass over his. Last I heard the minimum wage rose and Armey is still living, though no longer in Congress.

If the government does shut down, “nonessential” employees will not be paid. The bumbling Congress, however, will continue to be compensated for the little they do. Many Congressional representatives don’t care because they don’t need the money. A large percentage of our “lawmakers” are millionaires. Last time there was a government shutdown, people were paid retroactively. This time, back pay is unlikely. With so many government employees experiencing pay cuts because of furloughs, an additional pay cut is onerous. Congress seems unconcerned with the plight of the average government worker.

The only good news in this mess is that the American people aren’t stupid. Most of them blame gridlock on House Republicans. The last time government shut down in 1995-96 (when two shut downs lasted a combined 26 days), the people responded by giving President Bill Clinton a second term nine months later. Clinton defeated rival Bob Dole in part because of Dole’s leadership in the government shutdown. With 2014 mid-term elections imminent, Republicans should be worried. When President Obama spoke at the Congressional Black Caucus dinner in late September, he asked people to gear up their activism for the 2014 elections. If the House of Representatives looked more like the Senate (or if more Republicans had good sense), perhaps we could avoid this constant budgetary brinkmanship that has plagued us for the past four years.

Julianne Malveaux is a Washington, D.C.-based economist and writer. She is President Emerita of Bennett College for Women in Greensboro, N.C.

U.S. Doesn’t Care about Poor People

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(NNPA) When the poverty data was released on September 17, comparing the poverty situation in 2011 to that in 2012, many hoped that poverty levels would drop as an indication of economic good news. But while the GDP (Gross Domestic Product) has risen, and the wealthy are gaining income, those stuck at the bottom are still simply stuck.

Poverty rates in 2013, at more than 15 percent, are almost the same as they were last year. Poverty in the African American community, at more than 27 percent has not improved. Similarly, Latinos experience an unemployment rate more than 26 percent. Again, no improvement.

In the face of this data, Congress decided to cut food programs by $40 billion, which kicks between 2 and 4 million people out of the program. Additionally, there are work requirements now imposed on those who receive food stamps. With official unemployment rates exceeding 7 percent, where are the poor supposed to find employment? It appears that this is a war, or at least a series of aggressive actions. Congressional stereotypes about the poor has driven their policy decisions to cut back programs such as food stamps and to require work as a condition of receiving nutritional assistance.

The vote to eliminate nutritional assistance was achingly close, with a margin of about 10 votes separating those who decided to maintain food assistance and those who wanted to cut it. Every Democrat voted not to cut food assistance; some Republicans joined them. I guess those who voted to reduce these benefits have no hungry people in their districts.

The message of the poverty data is that our nation really does not care about poor people. We have seen that “trickle down” and other theories fail, and we have yet to implement a model that requires those who have gained economic expansion to share their gains with an economy that is faltering.

The poverty data, absent of action, suggests that some people think it will “work itself out” the way it has before. Those with that opinion are ignoring the fact that our economy is restructuring. It is easier to get a service job than a professional job and manufacturing jobs are disappearing. Cities have failed to provide economic development dollars to those who would bring jobs to their cities.

I’m not talking about any kinds jobs though. I’m talking about jobs that generate a living wage. In Washington, D.C., Mayor Vincent Gray vetoed legislation that would raise the wage for those who work in “big box” stores such as Wal-Mart and Best Buy. He was stuck between the choice to create more jobs or to impose fair wages. He chose the former.

Mayors across the country are faced with these kinds of choices, so this can’t be local policy. It has to be national policy to raise the wages of those at the bottom. Sure, the business community will fight this, asserting that they won’t hire if wages rise. That’s not necessarily true. Higher wages may cut their profits just a bit, but shouldn’t employers be willing to see slightly lower profits in exchange for the economic survival of their workers?

Those who aren’t on the bottom now exhale and say this issue doesn’t matter to them. But the way we are going, the person who is living high on the hog today might be making low wages (or no wages) tomorrow. The low wage issue is important to all of us.

This poverty issue affects all of us, and we need to respond to the fact that too many of our brothers and sisters (of all races) are poor and unemployed or under employed. Our indifference is a profound concurrence in the oppression of others.

Julianne Malveaux is a Washington, D.C.-based economist and writer. She is President Emerita of Bennett College for Women in Greensboro, N.C.

Congress is Eating Away at Food Stamps

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(NNPA) Steven and Laurie, a White married couple that lives near Richmond, Va., work at a big box store. She is a cashier; he works in the storeroom. Each earns about $9 an hour but neither works 40 hours a week. Indeed, they are lucky to pull 40 hours a week combined. Sometimes weeks they are fortunate enough to pull 45 hours a week between them. Some weeks their combined hours are just 30.

I met Steven and Laurie (not their real names) on a telephone press conference in April. They said they had three children and also mentioned that they were White because “everybody thinks only Black people get these benefits.”

Seven and Laurie were troopers. They talked about buying clothes at thrift shops, searching for food bargains and planning menus around coupons, and managing to occasionally eke out a few pennies to buy occasional new things for their children. They didn’t complain, but spoke matter-of-factly about their financial situation. They also spoke of looking for new jobs, but fining little available in their community.

Because they don’t work enough hours, neither Steven nor Laurie qualified for health insurance. Their combined incomes are so low – between about $16,000 and $21,000 – that they are officially poor (the poverty line for a family of five is $27,540). They qualify for food stamps, (called SNAP, or Supplemental Nutrition Assistance Program) and they consider them the blessing that helps them make ends meet.

Sometime this month, though, Congress will come up from the Syria conversation to, perhaps, cut allocations for SNAP. The cut of $40 billion would deny between 4 and 6 million people food stamps. The new legislation would also allow states to require SNAP recipients to work. Some of the 12 million unemployed may not qualify for SNAP assistance, nor will childless adults who do not have work. Some restrictions may also limit SNAP assistance to three months every three years. While some states have waived SNAP requirements because of their high unemployment rates, federal legislation may prevent such waivers.

The proposed cuts in SNAP is twice those proposed in May. These cuts are being driven by Republicans who, in their budget cutting frenzy, have been indifference to poverty. After all, the “p” word is used to infrequently in political debate, that one might think that poverty has magically gone away. Or, perhaps our legislators just don’t care.

The people who receive SNAP assistance don’t conform to any stereotypes. According to the Center for Budget and Policy Priorities, about 20 percent of those receiving SNAP have college degrees. Half of the recipients are White. A third of the women who get help from SNAP are older than 40. Fifty thousand of those who receive SNAP assistance are veterans.

So many families are food insecure because of the employment situation. The unemployment rate dropped just a tick in August, slipping from 7.4 to 7.3 percent. Still, there are 11.3 million unemployed people. More than 4.3 million people have been unemployed for more than half a year. These folks, still looking for work after more than 27 weeks, would be no longer eligible for SNAP assistance.

The unemployment rates, as reported by the Bureau of Labor Statistics, clearly understate unemployment. When we count people who work part-time but want full time work, those who are marginally attached to the labor force, the overall unemployment rate rises from 7.3 percent to 14.6 percent.

The Black unemployment, reported at 13 percent, soars to 26 percent, a depression level of unemployment. It is undeniable that the unemployment rate is improving, with overall unemployment dropping from 8.1 percent a year ago to 7.3 percent today. But the downward pace has been glacial, with the level of job creation (169,000) too slow to keep up with job loss. Millions will remain unemployed for the next six months or so.

Against this backdrop Congress has the temerity to propose legislation that will deny millions of families SNAP benefits. Their indifference to joblessness and poverty is amazing. They’ve not exhibited similar indifference for those at the top, maintaining tax breaks for them.

Steve and Laurie struggle to make ends meet. They are good, hardworking, and people just like millions of others. They work part time for economic reasons, preferring full time work. They need food stamps, and it is not clear, under proposed legislation, whether they will qualify for them. I worry about Steve and Laurie, and I also worry about the 11.3 million unemployed people, the 4.3 million who have not worked in half a year, and the 2 to 4 million families who will not qualify for SNAP. Worry is not enough, though. This is yet another reason why a people’s uprising is necessary. The uprising must transcend race lines – it ought to reflect Dr. Martin Luther King’s Poor People’s Campaign. Congress won’t change its indifference to the poor unless somebody makes them.

Julianne Malveaux is a Washington, D.C.-based economist and writer. She is President Emerita of Bennett College for Women in Greensboro, N.C.

Obama Selling 'Wolf Tickets' on Syria

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(NNPA) President Barack Obama stepped on a big limb when he threatened “limited action” against Syria because the country’s leaders allegedly used chemical weapons against their own people. There are international bans against the use of chemical weapons, with Syria one of few countries not supporting the ban. Chemical weapons allegedly killed more than 1,400 Syrians, and the ongoing civil war may have killed as many as 100,000.

President Obama announced his willingness to act on Syria’s domestic chemical intrusion before Labor Day, but he has backpedaled and asked for Congressional approval. What will he do if Congress says no? Will he face the international community conceding that he has less power than he thought, or will he go ahead and take military action without congressional approval?

Reportedly, U.S. troops in the Middle East were ready to follow the orders of the Commander-in-Chief before they got orders to slow down any action. Perhaps President Obama is finally listening to the sentiment of the American people, who, according to several polls, do not support action against Syria. Congresswoman Barbara Lee (D-Calif.) and dozens of other members of Congress sent the president a letter urging debate on any military action against Syria. Does the urgency of a strike against Syria recede over time?

Have we learned from the lessons of Iran, Afghanistan, and, yes, Vietnam? In the last case, “simple” military action led us into a war that lasted for nearly a decade, and the loss of tens of thousands of lives. The “end” of that war was hardly decisive, with a withdrawal that didn’t so much save the day as salvage the our nation’s bruised ego. If allegations against Syria are true, they have clearly crossed a line. Still, it is not clear that unilateral action from the United States is the solution. While the United Nations is not always as effective as it might be, I’d prefer United Nations concurrence to United States go-it-along position in this matter.

From Iraq, we must remember that verification of the use of chemical weapons is key to any action. I’ll never forget Secretary of State Colin Powell holding up a small container and saying, “This could be anthrax.” Turns out, it wasn’t. Based on that vivid display, we stepped up our action against Iraq, and a decade later we are still there. General Powell said that if we broke it, we have to fix it. We’ve not fixed it – we are withdrawing, and billions of dollars and thousands of lives later, the situation is almost as murky as it was when we entered that country.

What will we do if Syria chooses to respond to our “limited” military action? Action and counteraction are the first steps to war. We aren’t ready for that. We’ve got existing military commitments, and an already-challenged budget, something not often mentioned in the face of this impending crisis. Military experts say Syrian action could cost about $100 million. Depending on escalation, we could easily end up in billion-dollar territory.

Meanwhile Congress and the president are on a budget brink. Government could actually shut down at the end of the fiscal year unless unlikely compromises are made. Will President Obama be forced to offer budget concessions in order to get Republican votes to support limited action against Syria? If he does, what implications will that have on the domestic budget, especially in the face of budget austerity? Will the money to cover a Syria strike come from the already-cut food stamps program, from sparsely funded education programs, from already-embattled health care?

Former President Bill Clinton reportedly supports military action against Syria, and regrets that the United States did not get involved in the massacre in Rwanda that claimed nearly 1 million lives. With Rwanda, though, a bipartisan group of legislators pushed Clinton to take the case against Rwanda to the United Nations and he did not. President Obama has not suggested United Nations cooperation but instead insisted that it is time to take action.

Where is the peace movement? Are they shying away from their traditional anti-war stance because President Obama, not President Bush, is in the White House? Once, you could count on groups like Code Pink to lift their voices against military action. Now their silence speaks volumes.

There are alternatives to “limited military action” in Syria. Yet, those alternatives have yet to be explored. We shouldn’t involve ourselves in what might be a multi-billion dollar action just so President Obama can sell wolf tickets (or bragging rights) and count on Congress to cash them.

Julianne Malveaux is a Washington, D.C.-based economist and writer. She is President Emerita of Bennett College for Women in Greensboro, N.C.

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